Brazilian Real Gains vs. Dollar, Unhindered by Poor Fundamentals

The Brazilian real managed to gain on the US dollar today even as economic indicators in Brazil were not supportive and led to speculations that the central bank will be limited in its ability to raise interest rates.
Brazil’s economic activity contracted by 0.01 percent in September from the prior month, according to the Central Bank of Brazil. There are concerns that the nation’s budget deficit will lead to credit rating cuts. All these negative factors will likely prevent fast tightening of monetary policy.
USD/BRL fell from 2.3338 to 2.3201 as of 18:25 GMT today.

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